nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2017‒11‒05
eight papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Capital deepening and efficiency in Morocco By EZZAHID, Elhadj; NIHOU, Abdelaziz
  2. Did the Egyptian protests lead to change? Evidence from Egypt's first free Presidential elections By Nelly El-Mallakh
  3. Constrained School Choice in Egypt By Krafft, Caroline; Elbadawy, Asmaa; Sieverding, Maia
  4. Does Maternal Education Affect Childhood Immunization Rates? Evidence from Turkey By Mustafa Özer; Jan Fidrmuc; Mehmet Ali Eryurt
  5. “The Teacher Does Not Explain in Class”: An Exploration of the Drivers of Private Tutoring in Egypt By Sieverding, Maia; Krafft, Caroline; Elbadawy, Asmaa
  6. Turkish investments abroad, with a special focus on Central and Eastern Europe By Tamas Szigetvari
  7. CO2 emissions and financial development: evidence from the United Arab Emirates based on an ARDL approach By Diallo, Abdoulaye Kindy; Masih, Mansur
  8. A new strategy for European Union-Turkey energy cooperation By Simone Tagliapietra; Georg Zachmann

  1. By: EZZAHID, Elhadj; NIHOU, Abdelaziz
    Abstract: Investment is at the heart of economic growth. It increases the available stock of capital for productive activities and allows the introduction, in the productive process, of improved technology embedded in new capital items. Monitoring accumulation and use of this capital is a big issue. Our paper aims to bring a diagnostic of the Moroccan case by responding to these two questions: is capital stock sufficient? Is it efficiently used? Our results show that Morocco recorded an overinvestment in the 1970s, an underinvestment in the period 1982-2004 and an overinvestment since mid-2000s. The estimation of the rate of return to capital in the Moroccan economy indicates that RRK was under 10% until the beginning of the 1990s. Since then, it recorded a steady increase that culminated at 18% around 2004. After this date, it began to decrease. We attribute the low level of capital-labor ratio in Morocco to the high price of investment goods compared to consumption goods especially before 2000, to the insufficiency of human capital accumulation and absorption, and to the low level of TFP. The major conclusion of this paper is that the debate about the efficiency of capital use must go hand in hand with an exploration of why capital accumulation in Morocco is insufficient.
    Keywords: Investment, capital, efficiency of capital use, rate of return to capital, factors’ total productivity, Morocco
    JEL: E22 O11
    Date: 2017–10–03
  2. By: Nelly El-Mallakh (Centre d'Economie de la Sorbonne)
    Abstract: Did the Egyptian protests lead to political change? I examine the effects of the first and second waves of Egyptian protests that started in 2011, on voting outcomes during Egypt's first free Presidential elections that took place between May and June 2012. I geocoded the “martyrs” - demonstrators who died during the protests - using unique information from the Statistical Database of the Egyptian Revolution and exploited the variation in districts' exposure to the Egyptian protests. Using official elections' results collected from the Supreme Presidential Electoral Commission (SPEC) and controlling for districts' characteristics using Census data, I find suggestive evidence that higher exposure to protests' intensity leads to a higher share of votes for former regime candidates, both during the first and second rounds of Egypt's first presidential elections after the uprisings. From the period of euphoria following the toppling of Mubarak to the sobering realities of the political transition process, I find that protests led to a conservative backlash, alongside negative economic expectations, general dissatisfaction with government performance, decreasing levels of trust towards public institutions, and increasing recognition of limitations on civil and political liberties
    Keywords: Egyptian protests; Presidential elections; voting outcomes; martyrs
    JEL: D72 D74
    Date: 2017–10
  3. By: Krafft, Caroline; Elbadawy, Asmaa; Sieverding, Maia
    Abstract: This paper examines patterns of school choice in Egypt from primary through higher education. We use a mixed-methods approach that combines survey data with qualitative in-depth interviews to explore schooling decisions. Some private and religious schools exist, but we find that in most geographic areas school “choice” at the pre-university level is effectively limited to public schools—despite their inadequate quality. Although there has not been much change in the attendance of private schools at the pre-university level, we find that attendance of private higher education institutions has increased over time. Azhari (Islamic religious) school attendance at the pre-university level has increased over time as well, possibly indicating a reaction to the low quality of public schools. Overall, when choices are available, families still tend to prefer public schools due to their low cost, though private and religious schools are generally perceived to be of higher quality.
    Keywords: education,school choice,private schooling,religious education,inequality of opportunity,Egypt
    JEL: I21 I22 I23 I24 N35
    Date: 2017
  4. By: Mustafa Özer; Jan Fidrmuc; Mehmet Ali Eryurt
    Abstract: We study the causal effect of maternal education on childhood immunization rates. We use the Compulsory Education Law (CEL) of 1997, and the differentiation in its implementation across regions, as instruments for schooling of young mothers in Turkey. The CEL increased the compulsory years of schooling of those born after 1986 from 5 to 8 years. We find that education of mothers increases the probability of completing the full course of DPT and Hepatitis B vaccinations for their children. Furthermore, education increases the age of first marriage and birth, changes women`s and their spouse’s labour market status, and significantly affects women`s attitude towards spousal violence against women and gender discrimination in a manner that empowers women.
    Keywords: DPT (diphtheria, pertussis and tetanus), Hepatitis B, maternal education, autonomy of women, fertility, difference-in-difference-in-differences, instrumental variable
    JEL: H51 H52 I12
    Date: 2017
  5. By: Sieverding, Maia; Krafft, Caroline; Elbadawy, Asmaa
    Abstract: Widespread reliance on private tutoring has raised concerns over the hidden costs of Egypt’s “free” education system. This paper examines the drivers of tutoring at different levels of education, using nationally representative survey data as well as qualitative data on youth experiences in public, private, and religious schools. Our findings indicate that the drivers of tutoring are multiple and vary by schooling level. Structured around high-stakes exams, the Egyptian education system has fostered the growth of a diverse tutoring market. In general secondary school, tutoring has become a social expectation that leads teachers and students to shirk in school to devote more attention to tutoring. In basic education, teacher pressure is a major motivation for public school students to take tutoring. In order to reduce the prevalence of tutoring and ensure greater equality in education, there is an urgent need to test mechanisms for ensuring accountability in schools.
    Keywords: Private tutoring,educational supplements,school quality,Egypt
    JEL: I21 I22 I24 N35
    Date: 2017
  6. By: Tamas Szigetvari (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: With the growing global integration of the Turkish economy, the country has emerged as a capital investor abroad, and it has become one of the leading investors in its neighbouring regions. Beside the growing vitality of the Turkish corporate sector as a driving factor, the changing Turkish foreign policy has also promoted the active presence of Turkish companies in neighbouring countries, as part of its new strategy aiming at strengthening the central position of Turkey in the region. By looking for the motivations of TMNEs, we found different reasons depending also on the type of firms and the sectors they are active in. A continously increasing motivation of TMNEs for outward investment was the brandbuilding and the upgrading of their technologies, to be able to compete on more developed markets as well. We has also examined the special characteristics of Turkish OFDI in the Central and Eastern European countries. On the one hand, we could find here several of the above mentioned specificities of TMNEs motivations. They invest in these countries to enter new markets, in many cases they use other, mainly Dutch firms as the direct investor company. It was also common that they aimed by the investment to manage their brands more effectively and to improve EU costumers’ perceptions and attitudes towards their products. Central and Eastern Europe as a region closely connected to the core European markets which shares several institutional weaknesses of the Turkish domestic market may have a much higher importance for TMNEs investent in the future.
    Keywords: Turkish multinationals. OFDI, internationalization strategy
    JEL: F21 F23 G11
    Date: 2017–10
  7. By: Diallo, Abdoulaye Kindy; Masih, Mansur
    Abstract: This paper explores the influence of economic and financial development on carbon emissions in the United Arab Emirates. The study uses the ARDL approach in order to investigate the long run relationship between carbon emissions and a set of economic and financial variables. The long-run and short-run Granger-causal directions are captured through the Error Correction Model (ECM). In order to determine the relative contributions of economic and financial variables to the evolution of per capita carbon emissions, variance decomposition is used. The period considered for the purpose of this study is the full sample (1975–2013). To the best of our knowledge there is no study in this kind focusing only on the United Arab Emirates. Hence we are attempting an humble contribution with this regards. The findings tend to suggest that there is a decline of CO2 emissions in the long run. Also, considering the error correction model output, we can argue that the financial variables, especially the domestic credit to private sector, have an impact in CO2 emissions. This finding is in line with that of Shahbaz et al. (2013) who found out through two different studies (South Africa and Malaysia) that private sector credit had a reducing impact on CO2 emissions.
    Keywords: CO2 emissions, United Arab Emirates, Financial development, FDI, GDP, VECM ARDL
    JEL: C22 C58 Q56
    Date: 2017–06–03
  8. By: Simone Tagliapietra; Georg Zachmann
    Abstract: This paper was produced within the framework of the European Neighbourhood Energy and Climate Dialogues, with the kind support of Stiftung Mercator In a period of stress in the relationship between the European Union and Turkey, cooperation over energy could be a bright spot, because of strong mutual interests. However, EU-Turkey cooperation over energy requires a rethink. Up to now, gas and electricity have represented the main components of cooperation. Though highly visible, cooperation in these fields appears to be limited in practise. By contrast, cooperation in other fields – such as renewables, energy efficiency, nuclear energy and emissions trading – could make a real impact on long-term energy, climate and environmental sustainability, and on overall macroeconomic and geopolitical stability. On renewables and energy efficiency, the EU could support Turkey by scaling-up the financial support it currently provides within the framework of its climate finance commitments. This would reinforce the case for renewables and efficiency projects in Turkey, particularly as the cost of capital continues to represent a major barrier for these investments. On nuclear energy, the EU can make a sensible contribution to the establishment of a nuclear energy sector in Turkey. This can notably be accomplished by integrating Turkey into the framework of Euratom. On carbon markets, the EU can offer institutional support to Turkey, as is already being done with other countries such as China. Refocusing bilateral cooperation on renewable energy, energy efficiency, nuclear energy and carbon markets would be more effective and strategic for both the EU and Turkey. For the EU, it would provide an opportunity to put its sustainable energy leadership aspirations into practice, while opening up new commercial opportunities. For Turkey, it would enhance both climate and environmental performance, while reducing the energy import bill and energy dependency on Russia. This change in priorities would also be important to head off Turkey’s rush into coal. Turkey currently has the third largest coal power plant development programme in the world, after India and China.
    Date: 2017–10

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